South African maize futures ended Wednesday's session in weaker territory mainly on the back of rain forecasts and the strong rand weighing on prices and some position squaring ahead of Thursday's release of the USDA report.
The January 2012 white maize contract edged down R11 to R2,724 per ton, the March 2012 white maize contract lost R16 to R2,670 per ton, and July 2012 white maize shed R17 to R2,078 per ton, according to preliminary I-Net Bridge data.
The January 2012 yellow maize contract fell R20 to R2,725 per ton, the March 2012 yellow maize dipped R7 to R2,615 per ton and the July 2012 yellow maize contract shaved off R8 to R2,044 per ton.
The January wheat contract was flat at R2,779 per ton, while March wheat firmed R7 to R2,836 per ton, and the July 2012 wheat contract was up R33 at R2,922 per ton.
At 12:00 when the local grain market closed, the rand was at R8.09 to the US dollar from R8.10 previously.
“We ended a bit lower; there were a couple of factors. The rain forecast is weighing on prices - we still have to see whether that will happen within two weeks though.
“Chicago was also a little a bit softer and the rand a little bit stronger - which is negative for grain prices. The USDA report is due tomorrow and I think there's been some position squaring ahead of it. After tomorrow I think it will be one of the most volatile periods we're going to enter,” a trader said.
He added that just after the market closed they had seen that SA exported 130,000 tons of maize on December 9.
“We're now well over two million tons for the season already and this should support the season prices going forth,” the trader added.
Meanwhile, Dow Jones Newswires reported that US grain and soybean futures ended near unchanged levels on Tuesday, with corn supported by lingering South American crop worries and traders bracing for Thursday's crop reports.
Corn, wheat and soybean prices all stumbled lower in early trading, succumbing to market participants taking profits on Monday's sharp gains.
Rains moving through parched crop areas of South America enticed traders into reducing some risk exposure as well.
The South American rains, which will help the crop there, offset outside market support from a weaker dollar and stronger crude oil. However, corn drew support from some private crop forecasters saying the rains in Argentina are too late to avoid corn yield damage.
Corn futures stabilised after the early declines, as traders waited to see what impact rains in South America will have on yields, said Shawn McCambridge, senior grains analyst with Jefferies Bache in Chicago.
“The moisture may stabilise production, but not offset yield losses,” he added.
Traders bracing for tighter projected US corn-supply estimates in Thursday's crop reports from the US Department of Agriculture attracted buying on the early price declines as well.
The general market sentiment anticipates smaller US supplies, but until traders see it in print, investors will continue to take a cautious approach, McCambridge said.
Meanwhile, wheat and soybean futures were unable to climb into positive territory, but did manage to trim their initial slides.
Profit taking after recent gains was featured in both soy and wheat, as traders were leery of pushing prices further without fresh fundamentally supportive news to justify the advances.
Otherwise, traders are getting positioned for Thursday government crop reports, with traders evening positions, as the January reports have produced volatile price swings in recent years.
CBOT March corn ended unchanged at US$6.52 a bushel.
CBOT March wheat ended down 2 cents at $6.39 3/4 a bushel, while MGEX March wheat rose 2 1/2 cents to $8.12 1/4 and KCBT March wheat ended unchanged at $6.98. - I-Net Bridge